How well positioned are you in Fresh Departments to differentiate from the Big Box operators and your other local competition?
Fresh is sort of an overused and abused term. Just because we call something fresh does not always make it fresh in the eyes of the customer. We generally view fresh in two ways:
- Freshness in Fact which is where many retailers focus most of their attention.
- Freshness in Feeling which is how many customers decide to buy and reflects a store’s ability to routinely deliver on freshness.
Freshness in Fact, loosely defined for purposes of this blog is a focus on whether a product is safe for consumption, or in a minimum condition to sell. Could it make someone sick, is it expired, is it discolored, badly bruised, or damaged? These are the basic questions which is the daily routine in the store. These questions is what must be done all the time; but, is that all we must do to be a top tier retailer in Fresh? Unfortunately, Freshness in Fact as described is assumed and the expected standard. There is no credit earned for execution in this area only risk of blame when not completed to perfection.
Customers have so many choices today and they shop where it feels right to them. This reason alone is why the Freshness in Feeling standards must be considered for today’s operation. Excelling in this area may not be a matter of differentiation for very long as retailers are faced with growing competition from online sales and increased brick and mortar standards. However, one thing is certain, Freshness in Feeling will be essential going forward.
Listed below is the conditions customers tell us impact their attitude toward shopping a specific store. How many of these routinely exist in your stores?
- Bad quality: Whether it is dried out rotisserie or fried chicken from being under heat for too long or meat/seafood that goes bad after 1-2 days in the customer’s refrigerator because it was sold at end of shelf life, poor quality is top of the list for a customer.
- Short shelf life remaining: It is not just about milk anymore. Consider all items produced in the store: meat, sandwiches, salads, cut fruit, etc. How routinely are the items selling in self-serve cases sold near end of expiration versus closer to the production date or time?
- Quality of hot food bar items: Is your hot foods bar unappetizing after 5 PM from too much made in too few production cycles?
- Markdown stickers: Yes, there are discount shoppers, but a discriminating customer does not think much of a display comingled with multiple discount stickers among fresh items. They really do not believe it is a Manager Special.
- Cardboard boxes: Boxes being opened on the sales floor and stocked like a grocery aisle turn off a fresh customer. “I thought this was a fresh department?” Stores can do a much better job masking the cardboard and volume of case ready product to earn a reputation for fresh.
- Display conditions: Not every store can afford to have new display fixtures but cleanliness is non-negotiable. This includes no bad seafood odors and departments that are free from peeling, tears, discoloration, breaks, and leaks. Overall cleanliness and these specific issues are all conditions that make most customers feel uncomfortable about freshness
Below are the six focus areas for a retailer striving to be top tier in Freshness in Feeling standards.
Simplify where possible – It may all currently sound simple enough to operate a Fresh Department but the typical environments we work in have often been cobbled together by a variety of different leaders. There are multiple expectations added to the departments from different sources and over time and some of these demands may conflict. It is typical for the department to claim they are short-handed on resources. This is often an indication that time is being lost somewhere in the daily routine.
Maintain core item lists and always in-stock items – We expect the business to know the “must have” in-store produced items for every Fresh Department. These items should not be left up to the operators of the department but instead these items are assigned by Merchandising as they are the items that drive category performance. These items typically are based on the store’s volume, format, and most importantly demographic of the customers.
Re-engineer the department where necessary – It is important to look holistically at the work flow of the department (design and sequencing of tasks), scheduling, and supervision. In-store items must be prepared frequently enough and close to the target sales time in order to provide customers with freshest, best quality product, with the longest available shelf life after they buy.
Forecasted demand tools – Every operator tells us that they know what sells here! The truth is that they are only right part of the time. The operator should be the final decision maker on fresh, short-shelf life production and ordering as the conditions that impact these sales such as weather and local events are too dynamic to be completely included in any current forecasting tools. However, developing an effective balance between the science of a forecast and the art of the decision is what makes the critical difference of success one day at a time.
Change Management – Just because we want things to change and ask for it to happen, does not make it so. Change needs to be properly scoped, planned, tested, internally sold, supported and reinforced. Shorting these requirements is typically a formula for failure.
Reinforce Change to Sustain Benefits – 60% of all corporate initiatives fail to achieve the benefits after the initial implementation. There are many elements to why this can be the case, but it’s simple to say the company took their collective eye off the ball and failed to take into consideration all the internal cultural changes necessary to sustain the initial performance. Having a solid plan that integrates the changes into the organization and employs the proper performance management and reinforcing behaviors is critical to enjoying and regenerating the changes over time.
The beauty of the above recommendations is that they not only change the conditions that will make your customers feel how fresh you are, these are some of the same strategies we use to increase sales while reducing shrink. How many programs do you have that can simultaneously increase fresh sales by 1%-3% while reducing shrink by 10%-30%?